Accounting — Mixed Practice — Part 5: 40 MCQs with Explanations

Discount for quick repayment of debt is normally referred as Cash discount .

Assets accounts is the correct answer to “A chart of accounts generally start with which of the following types of accounts”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Depreciable value is the correct answer to “Total depreciation of an asset cannot exceed its:”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Cash Book is a subsidiary book as well as a ledger is the correct answer to “Which of the following statements is/are true”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

They must be made after the adjusting entries but before the reversing entries is the correct answer to “Which of the following is true regarding closing entries”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Closing stock is generally valued at Cost price or Market price whichever is lower .

Drawings is the correct answer to “Which of the following accounts will be debited if the businesss owner withdraws cash from business for his personal use”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Discount allowed is Expense of business .

Source documents is the evidence that a transaction took place.

Purchases is the correct answer to “Which of the following will be debited if a business purchases goods on credit”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Every business transaction affects at least Two accounts.

Discount allowed is a kind of deduction from Account receivable .

he term 2/10-n/30 implies that 2,10 % discount will be given if the payment is made within days or full amount is receivable within 30 days.

Return inward account is the correct answer to “Goods returned by customer should be debited to which of the following accounts”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Cash received for services rendered will Increase cash and equity .

Which of following best describes the increase in equity expands Business operations .

$5,000 is the correct answer to “If Cash=$1000 inventories=$4000 Debtors=$5000 fixed assets=? Capital+Liabilities=$15000 What is the Amount of total assets”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Depreciation decreases Capital .

An increase in provision for bad debt will Decrease net income .

Net working capital is the correct answer to “Current assets − Current liabilities=”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Assets-Liabilities= Equity .

Frequently during the accounting period is the correct answer to “The process of recording is done”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Fresh capital introduction will increase Assets and equity .

$6,000 is the correct answer to “Find out the value of assets if: Liabilities=$5000 and Capital=$1000”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

$5,000 is the correct answer to “Calculate the amount of cash if: Total assets=$10,000 Total liabilities=$10,000 Total Capital=$5000”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Capital increases if Revenue increases.

Capital of a business decreases if there is an increase in Drawings .

Decrease in capital is the correct answer to “If the businesss owner withdraws cash for his/her personal use what will be the effect on capital”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Net income equal to Revenues minus Expenses .

Increase assets and decrease assets is the correct answer to “Collection of account receivable will”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Payment of expenses will Reduce the assets.

Ledger accounts helps business to classify transactions according to their nature.

Office equipment is the correct answer to “Which of the following is a real account”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Debit balance is the correct answer to “Which of the following is the normal balance of a rent expense account”. Items of this type are drawn from the Accounting — Mixed Practice — Part 5 syllabus of Pakistani competitive exams, where the fact is tested verbatim.

Revenue and expense accounts are referred as Nominal accounts .

The real accounts are accounts of Assets, liabilities and Capital .

Building account is classified as Real account.

Office equipments account is classified as Real account.

If debit balance is greater than creadit balance then the account blance will be Debit balance .

The normal balance of capital account is Credit balance .